OCR Text |
Show | Does paying off those monthly balances make you feel like you’re | pedaling hard just to stay in place—or maybe slipping backward? Take Control Of Your Credit Cards BY oo REDIT CARDS ARE GREAT. TOBIAS WhichSlice Of This Pie Are You In? They're convenient, they're interest-free(if you household with n credit card pay infull each month). and they canpay you 2% or so on everything you cha But if you're amongthe nearly 70% of cardholders who do run bal: ces. _ | and pay interest each month, keep re ing. Credit cards makelife easier and | lubricate our economy. But, used wrong. they also canbe aterrible drag on your Andrew Tobias, the author, sestwo can finances. Are you using yours right? Make no mistake: Paying off the balance on acredit card is just about the best “investment” you can ever make. This year, more than 3 billion creditcand offers have been mailed out more { They Want To Help credit-card companies than30. on average. to every household j Do want you out of debt? in America, The last thing most ofthose 11 Candidly: no. But they don’t households needis another card—the { want your life wrecked by average card-holder has //. (Mary Black credit-card expenses, either. of Shawnee, Okla... wrote meto say she mye supported a varietyo' of had 43.) Householdcredit-card debt has onsumer-education efforts: morethandoubled inthe last six years | = For Plastic Made Simple, a free write: In fact. personal bankruptcies reached a MasterCard international, record high of 1.35 million in 1997, about eig timesthe rate in the Depression Someofus paid nota nickel in inter- | Attn: Fulfillment Center, 1970 Craigshire, St. Louis, Mo. 63146 © For Managing Your Debt, a underwritten by est—indeed we were paidtouse the j| brochure Visa, see box on page 6. | cards. Wegotfree flights or discounts on ie Tofifind a nearby credit counseling service, call the cars or actual cash moneyat the end of | National theyear, But mostof us fell ever deeper in debt, pedaling as fast as we could | ea dayatt at eee just to stay even—andstill slipping fur| ther behind. Sound familiar? The Consumer Federation of America’s executive director, Stephen | Brobeck, calls dependence on high- interest credit” “the Ronee of all conWell. today we're go- sumer problems.” in to do something about it es! Today! householc that pay the balance in fu More than 50 million households carry credit-card debt—average balance: £7000. Americans going bankrupt? ight times the rate in the Depression. If vou already use your credit cards well. you may pick up atip or two touse thembetter. /f you have no cards. you may decidethat’s not such a bad thi But most important, if you're on the be. What a handicap! If you could get caughtup,that 20% surcharge disappear. No lawsays you have 20% morefor everythingthanthere us. It's just a matter of making up) credit-card treadmill. \ y mindto break the habit. Once you you canstart the difficult but doable your money will stretch 20% fart! process of getting off than it does today. Andthink about his: If you char Make no mistake: Paying off thebalance onacredit card is just about the best “investment” you can ever make Not havingtopay 18% or 22%interest on acredit card is as goodas earning 18% or 22%. Risk-free. Tax-free. Think aboutthat for a minute. Where $1000toyour card and payjust the mi imummonthly requirement. it cou! take you morethan 20years topay about $2000in interest along the w:i onearth can you possibly eam a aranteed, tax-free, 18% return on your mon The banks Jove you. With your | hand, you are lending them mone) ( your deposits) at 5% or less; and the ey? The stock market sometimes goes up 18%—but it somet goes down 18% And whatever it does, the profits and or more dividends you do eamare subject to tax And think about this: For someone who runs a balance on his cards. life is 20% more expensive than it needs to COVER PHOTOS BY DOUG HOKE (M. BLACK), TOM BURTON (BOOTH), DAVID SCOTT SMITH (HOBLL) AND KARIEAN NG (A. BLACK bic that $1000—and you will have p; with yourright hand, you are borro\s ing back the very same money at 18 A lot of people blamethe credit-card! companies forthis. After all. they make credit sound sotempting. But you know contin PAGE 4 NOVEMBER1, 1998 PARADE MAGAZINE |